When the new Mombasa-Nairobi oil pipeline was conceived, it was primarily meant to improve efficiency in fuel transport while reducing the use of trucks that have been blamed for crashes and damage to the road networks.
More importantly, using the pipeline to ferry petroleum products was expected to significantly cut transport costs and drive down fuel prices with accruing benefits trickling down to consumers, thus bolstering the economy. However, such hopes appear to have been dashed by the Energy and Petroleum Regulatory Authority (EPA), which has stated that the pipeline, built at a cost of Sh48 billion, charges more than road transport to ferry oil.
It is perplexing that after investing heavily in the project, taxpayers will still continue to shoulder the burden of high transport costs, which make up the highest percentage in pricing of goods.
It is inconceivable that road transport is cheaper by as much as Sh2,000 per cubic metre in ferrying petroleum products from Mombasa to Eldoret. This difference adds up to impossibly huge costs when the cargo in question is in millions of tonnes. Yet all these costs are passed on to consumers, raising the question about the wisdom of having the pipeline in the first instance especially given the billions lost in fuel leakages and spills.
The EPA owes Kenyans clear answers on the numerous questions that now surround the whole pipeline project. For instance, what are the factors or levies that drive up the costs to such high levels? What is the cost benefit to consumers of having this pipeline?
If this situation will remain permanent, then the project is not viable, raising another question of whether or not proper feasibility studies were conducted before it was built.
EPA director-general Pavel Oimeke, who appeared before a parliamentary committee on Wednesday, was hard-pressed to provide satisfactory answers to these questions. The MPs, as the custodian of taxpayers’ welfare, should vigorously pursue this matter and demand a thorough audit. Public officials ought to be made to account for the culture of coming up with multi-billion shilling projects that end up performing far below par.
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